Banking Issues of “U.S. Persons”

Perhaps one of the earliest consequences of FATCA was hearing of the problems Americans abroad were having with banking. Prior to the creation of the IGA’s, FATCA would have imposed a 30% withholding charge on any recalcitrant persons or institutions. In spite of the fact that those possibilities are lessened due to the exchange actions being undertaken by the tax agencies of the non-US countries, the financial institutions continue to lessen ties with those deemed to have “U.S. taint.”

  • denying basic bank accounts, online checking accounts, etc
  • denial of brokerage and investment accounts
  • refusal to renew mortgages
  • foreign bank accounts are being closed
  • losing access to foreign pension plans
  • losing access to foreign life insurance contracts
  • prepaid credit card companies will not accept anyone with US-ness
  • US spouses are having to remove their names from joint accounts and assets in order to protect the family savings

        in the case of non-working women taking care of families, this can be an especially perilous predicament

  • people having to choose between losing their life savings to the IRS or losing their U.S. nationality

Here are some accounts that were included in the Alliance for the Defence of Canadian Sovereignty’s submission to the Senate Finance Committee in 2014:

Daniel Kuettel Dec 15, 2014 “Why does Uncle Same hate American Expats?

I am US Army veteran and I had to renounce US citizenship to refinance my mortgage. My bank does not
accept US clients. FATCA forces banks to identify their customers according to their place of birth and banks are discriminating against their customers due to this national origin information. National origin discrimination is a US federal crime, yet the US government argues that it is acceptable to violate US law outside of US jurisdiction. In response to this discrimination, I had contacted HUD and the VA for mortgage assistance, but they stated that they do not help American veterans who live outside of US jurisdiction. My US representation also didn’t represent me. In my view, the US government should make every effort to help and support its expats instead of violating US laws by enforcing discrimination against them.

RH Hastings comment

Can you imagine going to a bank because you want to invest some money in a mutual fund or set up a
retirement savings scheme…they give you a wide range of options, then you mention you are a proud citizen of the USA. They say, oh, we are sorry but cannot offer you anything beyond a simple checking or savings account. That was the moment my citizenship became a burden. It had nothing to do with taxes, but with US government policies directly impacting my life. Add to that the fact that I must submit bank account numbers and balances, then it becomes a tough choice to keep the blue passport. I do, however, have a greater appreciation of why our founding fathers rebelled. My vote wouldn’t count for much but my handing in the passport would. If you think it an easy choice though, then you know nothing.

AMH Not US Why I’m Giving Up My American Citizenship Passport

I’ve been a US citizen abroad for 8 yrs. Filing a tax return is the least of my worries compared to the repercussions of the unmitigated disaster that is FATCA. FATCA doesn’t just impose reporting regulations for foreign banks with US clients, many US banks are also closing accounts of US citizens who reside abroad. My IRA has been invested with a US brokerage firm since 1984. They sent me a letter in 2012 saying “move it or lose it– I had to liquidate my account and move it to another institution and until then it would be frozen. This would have put an enormous tax burden on me, so I had no choice but to change my address to that of relatives in the US. Likewise, I have a checking account with a large US bank and a debit card attached. My card was shut off, and I was told by VISA that I was “not allowed” to have a US checking account if I lived overseas! Outrageous! I have income and bills in the US, namely to a credit card which I am required to have in order to maintain my credit rating there. How can it be legal to shut me out of the banking system while still requiring that I file taxes? How can I pay my taxes without a checking account? The US also doesn’t appreciate how this adds insult to injury for those of us who live under already onerous reporting and taxation in our host countries. And the fact that FATCA was introduced by none other than Charlie Rangel, one of the most corrupt members of Congress guilty of financial misconduct, is laughable and insulting.

Anthony July 2, 2014 at 10:05 pm
‘Twas the Night Before FATCA

Had my first FATCA related experience today, July 2nd. I’ve been living in [xxxxx] for the past 12 years as a legal resident and banking at the same institution with zero problems. I do online wire transfers from my US based bank as needed, and use a Visa check card to withdraw cash. I went in today to withdraw $2,000 from my U.S based Visa check card and I was shuffled to some manager who then shuffled me to someone else, eventually it was clear no one knew what to do, I was an American citizen and toxic. After about 30 minutes they gave me my cash and told me that I would need to fill out paperwork the next time I came into the Bank. I got the impression my days were numbered as a bank client. As a retiree living on a modest pension, I’m by no means some high roller, and file my taxes on time every year. If all the banks close their doors to US citizens living abroad I honestly don’t know how we will survive. I guess we use western union or some other system that charges 6-8%. I’m currently paying only 1-2% to get cash abroad from my US based bank. Add this to the money
I’m losing from low CD rates and you can see that retiree’s living abroad are really paying a high price

Here is a recent situation in Canada, where an infant received a letter from a major Canadian bank.

So Now the CRA is Going After Infants

As the world’s media reports on the Panama Papers exposing wealthy tax cheats, a Canadian bank and the Canada Revenue Agency prepare to hand a Canadian baby’s financial records to a foreign government.

“Dear Valued Customer” begins the bank’s letter to the six-month-old girl.

The bank told the wee “valued customer” that information on her small account may be reported to Canada Revenue Agency (CRA). “In turn, CRA will share information with the U.S. Internal Revenue Service (IRS).” The letter directed the girl — whose name we’re keeping confidential to protect her privacy — to complete, sign and mail forms.

And why is TD going after a client too young to walk or talk. Because, according to the letter, “her place of birth is the United States.”

She was born in the U.S. last year while her Canadian parents were working there. But because both parents are Canadian citizens, their child has been a Canadian citizen from the day she was born. But because of where she was born, the U.S. Congress, U.S. Treasury and IRS insist they have the right to seize her private financial records — and those of and anyone else born in the U.S……


To date, it seems we are still hearing more stories affecting those living in Europe. Whether this will change to include more persons in Canada, Asia etc, remains to be seen.

The only step taken to rectify this sort of situation has been that of American Citizens Abroad (ACA); they have developed a way to maintain a U.S. account in the U.S.. This will be helpful to some but for Accidental Americans and others who do not wish to take actions that would suggest they believe they are U.S. citizens, the risk of banking/financial institution problems remains.
This page will be updated on a continuing basis …